Contract guarantee

About the product

Contract guarantee for the exporter’s bank

Bank guarantees from Eksfin assure the buyer compensation should an exporter fail to fulfil its obligations. The guarantee is provided by the exporter’s bank, but Eksfin can mitigate the bank’s risk by offering a contract guarantee (counter guarantee). The bank can draw on this if the buyer puts forward a claim under the bank’s guarantee to the buyer.

In cases where the exporter has a continuous need for such guarantees, the bank can apply for a framework agreement for contract guarantees from Eksfin. A framework agreement will significantly expedite the process of issuing individual guarantees.

How ther guarantee works

Contract guarantees for a variety of purposes

Eksfin can consider all types of guarantees the bank is willing to provide as long as they are related to exports. The bank guarantees cover a variety of purposes. The most common are:

• Tender guarantees – assure that bids received are serious
• Advance payment bonds – guarantee repayment of the buyer’s advance payment to the exporter
• Performance bonds – assure full delivery
• Warranties (assure the exporter’s obligation to remedy any omissions in the delivery during the export contract’s warranty period after delivery)

Conditions and structure

• Eksfin assures the exporter’s bank or other financial institution.
• Eksfin’s guarantee normally covers up to 50% of the bank’s risk. The bank bears the risk for the portion that Eksfin’s guarantee does not cover.
• Eksfin and the bank will be able to claim coverage from the exporter for any payments under the bank’s guarantee to the buyer. Any security is shared proportionately with the bank. 
• Required Norwegian content in the export contract: 30% A lower percentage of Norwegian content may qualify for financing upon assessment to determine whether the contract promotes Norwegian exports and value creation in a broader sense.
• Sustainability, environmental, anti-corruption and KYC requirements must be satisfied in accordance with relevant regulations.

How much does the guarantee cost?

Eksfin charges the same risk premium as the bank. The guarantee premium is calculated based on Eksfin’s contract guarantee for the bank.

How to apply

The bank applies to Eksfin for this guarantee. Please contact our customer advisers for more information.